[Report] Market Competitive Intensity: Latvia TOC

CATALYST
SUMMARY
ANALYSIS
- Introduction: MCI Index offers a robust framework for measuring the development of energy Market Competitive Intensity
  - The MCI Index shows how attractive a particular market is to new entrants in terms of the competitive environment
  - The MCI assessment draws on nine underlying metrics grouped into three broad clusters: Market framework; Supplier Push; Customer Pull.
  - The MCI Index measures the development of 20 diverse European gas and power markets
  - The MCI Index assesses markets in December 2006 and on 1st July 2008 in addition to driving a market switching forecast
  - Each of the nine pillars has an assessment scale to allow for the comparison of diverse markets (see appendix for more details)
  - Two differing overall MCI scores are calculated to ensure full clarity of results
    - A simple weighted average (additive) measure shows overall competitive intensity
    - A weighted multiple (multiplicative) measure shows overall competitive intensity
  - The MCI framework has a number of applications for your organization
- Context: Latvia' s lack of competitive intensity in both gas and power sees it remain ranked bottom of the markets surveyed
  - The pace of expected power market competitive intensity development in Latvia is such that it moves downwards in the rankings over the forecast period
  - Latvia continues to rank at the bottom of all the gas markets surveyed
- Power MCI: None of Latvia' s current or forecast scores break through the mid-way point on the scale
  - None of the Market Framework factors show particular improvement over the forecast period
    - Effectiveness of Regulator [2006: 3/10 2008: 4/10]
    - Ease of Third Party Access [2006: 2.5/10 2008: 3.5/10]
    - Effectiveness of Balancing and Data Transfer [2006: 2/10 2008: 3/10]
  - The dominant position of Latvenergo throughout the value chain will continue to constrain the Supplier Push metrics
    - Wholesale Market Fragmentation [2006: 1/10 2008: 1.5/10]
    - Retail Market Fragmentation [2006: 0/10 2008: 1.5/10]
    - Traded Market Maturity [2006: 0/10 2008: 0/10]
  - Customer Pull metrics will remain at the lower end of the scale in 2008, despite the development of full market opening in 2007
    - Access to Market Information and Assistance [2006: 1/10 2008: 2/10]
    - Consumer Representation [2006: 0/10 2008: 1/10]
    - Propensity to Switch [2006: 0.5/10 2008: 1.5/10]
  - Latvia' s power switching rates in 2008 will be very much at the lower end of the scale of the markets surveyed
- Gas MCI: Development in Latvia' s gas score over the forecast period remains modest across all metrics
  - All of the Market Framework factors will remain modest throughout the forecast period
    - Effectiveness of Regulator [2006: 2.5/10 2008: 3/10]
    - Ease of Third Party Access [2006: 0/10 2008: 1/10]
    - Effectiveness of Balancing and Data Transfer [2006: 1/10 2008: 3/10]
  - None of the Supplier Push factors will develop in any meaningful way by the end of the forecast period
    - Wholesale Market Fragmentation [2006: 0/10 2008: 1/10]
    - Retail Market Fragmentation [2006: 0/10 2008: 1/10]
    - Traded Market Maturity [2006: 0/10 2008: 0/10]
  - The Customer Pull metrics are all constrained by the fact that new market entrants are unlikely to arrive in force by 2008
    - Access to Market Information and Assistance [2006: 1/10 2008: 2/10]
    - Consumer Representation [2006: 0/10 2008: 1/10]
    - Propensity to Switch [2006: 1/10 2008: 2/10]
  - Latvia' s gas switching rates will remain modest in both the residential and non-residential sectors
- Outlook: Latvia is unlikely to create significant commercial opportunities for new market entrants in the near term
  - Limited progress in competitive intensity over the forecast period results in zero multiplicative scores for both gas and power in 2008
    - Power scores
    - Gas scores
  - The ongoing position of Latvenergo significantly limits the attractiveness of Latvia to new market entrants
    - New Market Entrant Opportunities, Power
    - New Market Entrant Threats, Power
  - Low MCI scores indicate that few, if any, commercial opportunities exist in the Latvian gas market during the forecast period
    - New Market Entrant Opportunities, Gas
    - New Market Entrant Threats, Gas
- MCI Scores
APPENDIX
- Definitions
- Ask the analyst
- List of Tables
  - Table 1: Market Competitive Intensity, Latvia 2006-08
  - Table 2: MCI Additive, Europe 2006-2008
  - Table 3: MCI Multiplicative, Europe 2006-2008
- List of Figures
  - Figure 1: MCI Assessment Scale
  - Figure 2: MCI Assessment Framework
  - Figure 3: MCI Market Coverage
  - Figure 4: MCI Scales
  - Figure 5: MCI Applications
  - Figure 6: European Power Market Competitive Intensity, 2006-08
  - Figure 7: European Gas Market Competitive Intensity, 2006-08
  - Figure 8: Power Market Competitive Intensity, Latvia
  - Figure 9: Switching Forecasts, Latvia 2008 [Residential: 05% Non Residential:14%]
  - Figure 10: Gas Market Competitive Intensity, Latvia
  - Figure 11: Switching Forecasts, Latvia 2008 [Residential: 05% Non Residential:13%]
  - Figure 12: Market Competitive Intensity, Latvia
  - Figure 13: Scale for MCI Assessment, Effectiveness of Regulator
  - Figure 14: Scale for MCI Assessment, Ease of Third Party Access
  - Figure 15: Scale for MCI Assessment, Effectiveness of Balancing and Data Transfer
  - Figure 16: Scale for MCI Assessment, Wholesale Market Fragmentation
  - Figure 17: Scale for MCI Assessment, Retail Market Fragmentation
  - Figure 18: Scale for MCI Assessment, Traded Market Maturity
  - Figure 19: Scale for MCI Assessment, Traded Market Maturity
  - Figure 20: Scale for MCI Assessment, Access to Market Information and Assistance
  - Figure 21: Scale for MCI Assessment, Consumer Representation
  - Figure 22: Scale for MCI Assessment, Propensity to Switch

Market Competitive Intensity: Latvia

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